Digital Advertising in Croatia Reached Nearly 90 Million Euros Last Year

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The value of investments in online advertising in Croatia last year amounted to 89,970,000 euros, estimated by the first Croatian Online AdEx (eng. advertising expenditure – advertising costs) study by the Interactive Advertising Bureau Croatia (IAB), and this year an eight percent growth is expected. Display advertising accounts for 39 percent of the total share, with 19 percent each for search engine advertising and social media advertising, and two-thirds of display advertising was held by domestic publishers in 2021.

The share of mobile advertising was, according to the study, 72 percent and is expected to grow to 77 percent this year. Moreover, 93 percent of advertising on social media is attributed to Meta’s platforms: Facebook reaches 54 percent and Instagram 39 percent.

Rapid Development

Dunja Ivana Ballon, Executive Director of the Croatian Association of Market Communication Agencies (HURA!) and IAB Croatia, views the rise of digital advertising in relation to global trends and European digital movements. Although small, she explains that Croatia is a very dynamic market with high potential and a tendency for progress and expansion.

According to Ballon, their AdEx for 2021 estimates the value of spending on digital advertising at nearly 90 million euros if advertising from Croatia to abroad and classifieds data (individual user ad postings, but not banner advertising), which are excluded from AdEx for a true picture of the market in accordance with IAB standards, are not included in the estimate.

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– In the European context, this is an excellent result indicating rapid development. Not bad for small Croatia. It shows us that we are growing, developing, and becoming more competitive on the European digital scene. These estimates are also a catalyst for that progress. The dominance of display advertising is certainly noticeable, with one-third of its 39 percent relating to video formats, and half is purchased programmatically. The same is true for mobile advertising.

The data was provided by members of IAB Croatia and the working group, whose digital experts Vjeko Srednoselec (dentsu Croatia), Marijan Mihić (Advans Adria), Saša Milinović (Omnicom Media Group) and Boris Zatezalo (Httpool) did a great six-month job, while Ipsos, as an independent partner, conducted data analysis and synthesis, with support from IAB Europe and its chief economist Daniel Knapp – said Ballon.

Return to Brand Building

With further growth of total advertising by eight percent this year, she is convinced that mobile advertising will grow by five percent and that advertising on social media will strengthen on Instagram. Ballon finds it interesting that as much as 80 percent of users consume video content on mobile devices, and this number is expected to rise to 85 percent this year.

Trends in Croatia correspond to digitalization and consumer behavior, and smart TVs, homes, watches, and other devices will soon become new battlegrounds for advertisers, believes Vjeko Srednoselec, Chief Operating Officer (chief operating officer) at dentsu Croatia and a member of the IAB Croatia working group.

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– Until then, we witness the strengthening of existing platforms, profiling the most effective formats, enhancing content marketing, as well as a generally strong recovery of the market from the corona crisis in 2020. With further media convergence and the digitalization of television and streaming-platforms like Netflix, there will be no battle between TV and digital, but rather an intertwining, and finally, both channels will merge into one.

Digital marketing has long demonstrated its measurability and effectiveness. This has also led to potentially dangerous short-sightedness and an excessive focus on short-term performance while neglecting brand building on the other hand. For long-term success, it is necessary to build both. In the coming years, brand building will return, and both sides, sales and marketing, will develop – believes Srednoselec.

Double-Digit Growth

According to him, mobile advertising has surpassed natural consumption. Namely, platforms like Facebook, he says, are primarily used on mobile devices, and thus the budget has gone to mobile advertising.

– This raises additional questions about the adaptation of websites, web-shops, and other processes on mobile devices, of which advertisers must be aware. This year, we expect further strengthening of content marketing, which is still sought in various native formats, which are too often produced just to attract readers (or win some awards), but do not bring business value to the advertiser, who leaves the project dissatisfied.

Content marketing is a broad field that can achieve phenomenal results, in the case of a quality strategic approach. Here we expect double-digit growth, along with further positive growth and development of all other platforms. On other platforms, we expect further technological development, i.e., growth of programmatic, marketing automation, a surge in video advertising, and diversification of platforms – claims Srednoselec.

Digital advertising in Croatia, emphasizes Marin Ostojić, Creative Director at ZOO agency, is in constant growth that has been happening since the beginning of the development of digital advertising until today and will continue in the future. Ostojić perceives the growth trend as a consequence of technological development and its impact on human behavior.

Limiting the Big

Advertising, according to Ostojić, simply closely follows changes and moves to platforms where brands can meet their users more effectively. He also finds it interesting that channels, screen sizes, and user habits are changing, but video not only survives but also thrives. He interprets this as probably a love for moving images, which may be the reason why video is often used in advertising.

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– It would be a surprise if there were a decline in investments in digital advertising. The growth trend will continue. Probably until the moment when all related channels merge into one whole. Is Netflix with ads digital or TV? Or something else? Are interactive digital displays digital or outdoor advertising? With further technological development, advertising will evolve, and with it, the metrics. Furthermore, the European Digital Markets Act should affect large platforms, Meta and Google, and their relationship with advertisers and end users.

The law primarily targets them, seeking to limit their power and democratize the market. But the law is one thing, and practice is another. Large platforms will continue to fight to maintain their position within the newly created conditions. We can compare it to the General Data Protection Regulation, which was supposed to protect the privacy of end users, and among other things, obliged digital entities to be transparent in the use of cookies. Hundreds of billions of clicks later, the vast majority of users accept cookies, and privacy is again nothing. Some do it because they do not want to log in daily to the platforms and portals they visit, some because they want the digital services they use to work, and some simply because they are annoyed by the cookie policy pop-up – states Ostojić.

The regulation has good intentions, but in practice, Ostojić sees that users are told they can prohibit cookie tracking, but not without serious consequences for their user experience, so most continue as before. He expects continued growth in mobile and video advertising, and although the year ahead will be economically turbulent, it seems to him that investment in digital advertising and advertising as a whole will grow.

Achieving Compliance

For Robert Škunca, Regional Director of Grayling for Southeast Europe, the corona crisis accelerated digitalization, and digital business and digital life have become part of everyday life, not a passing fad. The results of the research do not surprise him, and he also expects growth to continue this year.

– This is supported by the latest Reuters annual Digital News Report, according to which as many as 87 percent of Croatian citizens read news primarily through online media, and the internet is the main source of news. Such and similar research will greatly contribute to the further growth and development of digital marketing. Digital services, on the other hand, were last regulated about 20 years ago when social networks did not yet exist, and online business itself has changed significantly since then.

Thus, the Digital Services Act and the Digital Markets Act are the European legislative response to new ways of communicating, trading, and informing via the internet. The laws have two goals: to create a safer digital space – safe social networks, safe online shopping, and privacy protection, and to encourage innovation, growth, and competitiveness in the European internet environment. I agree with many experts who say that the real challenge lies in the implementation of the law and achieving compliance across the European Union – Škunca is convinced.